Ebeneezer

Bitcoin 101

less than 1 minute read

It is easiest to think of Bitcoin as being digital cash. Like cash it is hard to track and hard to reverse without the consent of those involved in a transaction. Unlike cash it can be sent from person to person electronically over the internet. Critically, this is a direct person to person transfer and can happen without requiring any intermediary. There is no central control or organisation running Bitcoin. Further, you don’t need to be a person to open a Bitcoin account. Anything from cars to kettles could, and in fact will, use Bitcoin so long as they have an internet connection.

Bitcoin works by using a technology called a blockchain. A blockchain is nothing more than a distributed database with the special property that existing records in it are immutable. Anyone and everyone can have a copy of the Bitcoin blockchain and every transaction in it is public. There is pretty good anonimity because all a transaction shows are Bitcoin addresses and there is no direct link to individuals.